Final answer:
The question requires calculating the future incomes of the United States and South Korea after 20 years, given their respective annual growth rates and starting income levels. Using the formula for compound growth, the future incomes can be determined, showcasing the long-term impact of differing growth rates.
Step-by-step explanation:
The question seems to be centered on the topic of income growth and its implications. Considering a hypothetical increase in household incomes, the question asks for an analysis of economic outcomes. Specifically, it cites a scenario where South Korea's income grows at 4% annually while the United States' income grows at 1%, both starting from a base income level of $10,000. To calculate future incomes over 20 years, we would use the formula for compound interest or exponential growth: Future Income = Present Income × (1 + growth rate) number of years. Therefore, the future income after 20 years can be calculated for both countries:
- United States Future Income = $10,000 × (1 + 0.01) ^20
- South Korea Future Income = $10,000 × (1 + 0.04) ^20
Without delving into specific numerical answers, this illustrates that the rate of growth greatly affects the overall income increase over time. The United States' income, growing at a slower rate, will not multiply as much as South Korea's income over the same period.